In the shifting sands of the tech world, NVIDIA has solidified its dominance in the AIB GPU market, capturing an impressive 90% share in the third quarter of 2024. This development is set against the backdrop of an unexpected decline in the overall market, attributed to seasonal fluctuations. In Q3 2024, sales of discrete GPUs for personal computers fell to 8.1 million units, a noticeable drop from the 9.5 million sold in Q2, marking a rare downturn of about 14.5%.
Historically, the third quarter has been characterized by an uptick in GPU shipments due to increased consumer spending during the holiday season and attractive discounts on tech gadgets. Over the past decade, there has been an average increase of 7.9% in GPU shipments from Q2 to Q3, making this year’s drop all the more surprising. Only once before, in Q3 2018, had the trend been defied, and now it has happened again as reported by Jon Peddie Research.
Interestingly, while GPU shipments are decreasing, PC CPU sales have soared. The market saw CPU shipments surge to 20.1 million units in Q3 2024, which translates to a staggering 42.2% increase from the previous quarter, although there was a slight 3.4% dip compared to the same quarter last year. This dynamic shift has impacted the attachment rate of AIBs in desktop PCs, showing a significant 141% decrease and a 26.9% drop from Q2 2024.
Despite the overall market contraction, NVIDIA’s grip on the GPU market has only strengthened. The tech giant’s market share rose by 2% over the previous quarter and now stands at an 8% increase from Q3 2023 levels. In the process, it has squeezed Intel and AMD down to shares of 0% and 10%, respectively, for the third quarter of 2024.
Dr. Jon Peddie, President of Jon Peddie Research, offered some insight into the potential future of the market. He expressed concerns over the industry’s long-term prospects, citing expected increases in end-user prices due to anticipated tariffs. He projected that these economic pressures, coupled with stagnant wage growth, could usher the U.S. into a recession that would ripple through global markets as consumers tighten their purse strings.
Looking ahead, the outlook for overall GPU shipments is bleak, with JPR predicting a compound annual growth rate of -6.0% for AIBs from 2024 to 2028. This trend could culminate in a total shipment of 119 million units by the end of 2028, suggesting a shrinking market unless new factors come into play.
In conclusion, while NVIDIA currently enjoys a commanding lead in the GPU market, broader economic challenges and shifting market dynamics present a complex and uncertain future for the industry.
